GST Update no 228 on absence of GST Tribunal deprives remedy to assessee

Ambiguity and confusion in the dispute resolution mechanism in the system of taxation is a matter of concern taking into consideration the present scenario. Since the introduction of GST, there had been a steep and sharp rise in litigations mainly due to ambiguous provisions in the Law. Adding fuel to fire, non-constitution of Appellate Tribunal under GST regime and accumulation of adjudicating proceedings thereof has increased the trouble faced by the taxpayers. In such scenarios, the only remedy left with taxpayers is to approach the Court and seek relief. One case on similar issue was recently raised before the hon’ble Patna High Court in the case of M/S MANOKAMNA V/S UNION OF INDIA. The decision imparted in this case is the subject matter of present update.

The petitioner submitted that coercive action was taken by freezing the account of petitioner’s firm including the savings account of the proprietor as a measure of recovery. It was contended that the present application is ultra vires to the provisions of Section 16(4) of CGST Act, 2017. The petitioner challenged the action of freezing the account on the grounds of violation of Article 14 and 21 of the Constitution of India. The main submission for interim relief is regarding the fact that GST Council is deprived of availing remedy under Section 112 of GST Act, 2017. The counsel of the petitioner submits that the demand raised in the present case is dependent upon success in challenging the vires of Section 16(2) of CGST Act, 2017. Reference was made to decision of same court in C.W.J.C. No. 5403 of 2022. Further, petitioner challenged demand notice issued under Section 73 of CGST Act, 2017 but the consequential relief can be granted only if relief is granted as per Section 16(4) of CGST Act, 2017.

The Court after analysing the situation held that in accordance with provisions of Section 112 of the GST Act, giving relief would be tantamount to staying the effect under Section 16(4) of CGST Act, 2017.

The above decision has been abruptly delivered wherein the assessee is handicapped since no remedy is left to them for non-constitution of GST Appellate Tribunal. The assessee approached the Court with the expectation of seeking relief, but it is disheartening that the court restrained itself from considering the vires of the provision contained in section 16(4) of the CGST Act, 2017. It is not the case that the hon’ble High Court cannot decide upon the constitutional validity of the provisions but in the present case, the High Court refrained itself from even providing interim relief by allowing de-freezing the account of the petitioner. The non-constitution of GST tribunal in the Country is a long-standing problem which needs to be resolved at the earliest to speed up the disposal of pending disputes and imparting fair decisions.

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GST Update no 228 on absence of GST Tribunal deprives remedy to assessee

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